GlobalData: Policy support key for adoption of smart grid tech

July 5, 2019

The net metering market has grown significantly in the past five years, driven by simple installation procedures, favourable government policies and the affordability of rooftop solar photovoltaic (PV), according to GlobalData.

GlobalData’s latest report Smart Grid Policy Handbook 2019 reveals that solar PV is the most popular technology to use net metering for grid connection and small wind is at a distant second in terms of capacity connected to the grid.

GlobalData Power Analyst Harshavardhan Reddy Nagatham says in countries with large solar potential and ambitious solar PV targets, rooftop solar is being looked at as a major means to achieve a significant portion of the solar or renewable power targets.

“Net metering policies promote installations by making an installation not only reliable for backup but also profitable through the sale of surplus electricity to the grid,” Nagatham says.

A number of countries already have net energy
metering protocols and equipment in place. Countries including the US, Canada,
Mexico, Brazil, Australia, India and South Africa have policies that support
and subsidise the installation of net meters, as well as policies that mandate
utilities to provide a fair tariff to net metered customers.

The US is among the largest markets for net
meters. In the US, policy and regulatory drivers at the federal and state
levels for net metering and other smart grid aspects such as demand response,
energy storage and cyber-security have been the major drivers for innovation in
energy efficiency programs. The number of net metering customers in the US has
grown over 10 times between 2011 and 2018, increasing from around 178,000 in
2011 to over 1.9 million in 2018.

“The use of smart meters and demand response is also being actively encouraged by governments and deployed by utilities to better match the demand with the supply and reduce the peak load,” Nagatham says.

The development of standards and
interoperability protocols is something that most smart grid aspiring countries
have been actively pursuing. Several countries included in the report either
have smart grid standards established or have formulated roadmaps for the
implementation of standardisation of their respective smart grids. The US
Department of Energy (DOE), along with the National Institute of Standards and
Technology (NIST) and other standard development organisations, has developed
tools that define industry-based standards, protocols and business practices.

All smart grid projects approved and funded
under the various smart grid grant programs are required to address
cyber-security and interoperability standards devised by the DOE.

“The policy structure and incentives supporting
smart grid development in various countries have led to significant development
in smart grid projects in these markets,” Nagatam says.

“As a result of growing concerns over energy
security, most major electricity consuming countries are in the pursuit of
strengthening their grid reliability, which will help to minimise losses and
use electricity efficiently.”